Skip-a-payment is a program allowing members to skip a monthly loan or (with some institutions) a credit card payment without penalty during an especially tight financial season. Most credit unions offer this program during the holidays and during the summer vacation season. 

Here’s what you need to know about skip-a-payment:

How skip-a-payment works

Depending on the credit union, skip-a-payment is available to qualifying members once or twice a year. Some offer it year-round, but the vast majority limit the availability. The program is generally only allowed for loans with terms that are 12 months or longer, have been open for at least nine months and have a good payment history of six or more months. Credit unions allow it on most loans, with the exclusion of all real estate loans. Others only allow the payment break on fixed, closed-end consumer loans like auto and signature loans (so it would not be available on lines of credit or credit cards in that case). Nearly every credit union requires you to be up-to-date on your loan payments, and for you to have sufficient funds in your checking account to cover a nominal associated fee. 

Typically, Oregonians Credit Union Holiday Skip-A-Pay is offered seasonally in the months of November, December and January. However, we also have an option to apply for a financial hardship skip-a-pay.

If you are considering skip-a-payment, call or stop by Oregonians Credit Union to speak to a member representative for full details. 

Why choose to skip a payment 

The primary benefit of choosing to skip a payment is to gain some extra cash flow. During an expensive time of year, such as the summer or holiday season, members may be strapped for cash and forced to use their credit cards – and pay high interest rates – on every purchase they make. Skipping a large payment on a monthly loan or credit card frees up funds for day-to-day expenses so they don’t finish the month in the red. Removing the financial stress also makes these times of year more enjoyable.

Disadvantages of skip-a-payment

It’s important to consider these factors before choosing to skip payments on loans or credit cards:

  • Longer loan term 

Skipping a payment lengthens the life of a loan. The monthly payment you skip now doesn’t disappear; it is simply moved to the end of the loan. This means you’ll finish paying off this loan one month later than planned. 

  • Accrued interest

Most monthly payments to loans and credit card balances consist of contributions to 

both the interest and principal of the loan or credit card. While skipping a payment allows you to take a break from paying down the loan balance, interest still accrues and is tacked on to the end of the loan term. You’ll ultimately be paying more in overall interest over the life of the loan if you choose to skip a payment. 

What you must know before skipping a payment

While choosing to skip a large monthly payment during an expensive time of year may be a good choice under certain circumstances, consider these factors before going ahead with the program. 

First, many people fall out of the habit of making their monthly payments when they choose to skip just one loan payment. Payment history influences credit scores the most, putting you at significant risk of hurting your score if you skip a payment without your lender’s permission. Remember: this is a one-month-only deal! Be sure to make your payments in full next month.

Second, if you feel like you could use skip-a-payment every month, you may be in financial trouble and in need of assistance. It’s best to take steps now before falling into a deeper rut. Speak to a Oregonians Credit Union member representative for advice on money management, debt counseling, and budgeting tips. We’re always here to help!

If you are considering skip-a-payment, call or stop by Oregonians Credit Union to speak to a member representative for full details. 

Your Turn: Have you chosen to skip a payment on a monthly loan or credit card bill? Tell us about it in the comments.